• Worried about a crash or correction? Read on for valuable trading survival tips!
• Plus, get a pro trader’s prediction for the market you might need to watch out for… 
• Tim Sykes is giving out gifts this holiday … You can get yours here!

Rumors of a market crash will always create a stir in the market. And it’ll make traders rethink their whole trading style.

My opinion on the matter is simple — no one truly knows what’s going to happen. The market may crash, but maybe not. Either way, we must prepare for the worst.

There are a few ways to determine whether or not a crash is coming. I’ll go through some of my preferred indicators of market strength.

There are times to get aggressive, and then there are times to be cautious. Learn the difference.

Keep reading for my market crash survival tips and my opinion on our current market… 

Tips to Keep You Safe

I’ve learned these techniques over years of hard work and studying. They can be used in fragile market conditions or when stocks are spiking. That flexibility is what makes these tips great.

If you feel scared while trading — maybe you’re losing a lot recently or whatever the case — refer back to these. 

#1. Size Down

Don’t risk losing more money when the markets are slow.

There will be fewer runners. So don’t put as much on the table. Instead, focus on the process and percent gain instead of dollar gain.

#2. Focus on Stocks With News

In hot markets, it’s OK to get aggressive. Sometimes penny stocks will run for no reason and you can still safely profit.

But that’s not the case in slow/shaky markets.

If a crash is coming, you should focus on the best plays. Make sure there’s a reason for the momentum.

#3. Stop Losses

Use stops, whether they’re real or mental. You’ve gotta protect yourself.

I encourage you to practice mental stop losses. It can help you master your emotions. That’s an essential part of day trading.

Remember Sykes’ #1 rule: cut losses quickly.

#4. Stay Up to Date

You don’t want to be the last one to hear the crash is here. If you continue to watch the news and the markets, you’ll be better prepared.

This gets into my top tools to measure market strength and predict crashes… 

Is a Crash Coming?

I don’t know. But we can look at the evidence to make a guess.

There are a lot of different tools that measure market strength. But sometimes it’s best to just keep it simple.

• Follow the S&P 500 ETF Trust (NYSE: SPY). It’s an ETF that tracks 500 top businesses that trade on the U.S. stock exchanges. A ton of traders and other workers in the industry use it to gauge market strength. So let’s take a look… 

In early December 2021, the SPY dipped and rebounded off support that was set back in early September 2021.

Since then, it’s tried to break through $470. But it’s having some trouble.

I can see it going either way … the price will fall after failing the breakout or it’ll gap up and run.

That brings me to another tool I use to measure markets… 

• Watch the news. It sounds simple, but the market often reflects world events. If you stay up to date, you’ll get a general sense of market attitude.

I know you’re probably looking for a yes or no answer. But no one can predict the market perfectly, so it’s best to always focus on the process.

Final Thoughts

I’m trading more conservatively as the SPY fails new highs. And my eye is trained on the news to catch any big stories or economic updates.

I’d suggest you do the same.

Preparation is key,

Roland Wolf

Editor, The Wolf’s Den